Uber decides to defy city on ride charges

Peter Faris, head of Szabo Faris LLC Transportation Solutions in Washington, D.C., works with Uber, a technology firm that has created an app that allows consumers to use their mobile devices to request a nearby taxi or limousine. Uber is presently fighting Houston officials over the city's ban on charging for rides.

Peter Faris, head of Szabo Faris LLC Transportation Solutions in...

At least one ride-sharing company has decided to openly defy city law that bans its unlicensed drivers from charging for rides.

While a few free-ride promotions remain ongoing, Uber spokeswoman Nairi Hourdajian confirmed Tuesday that the service, which connects interested riders with willing drivers via smartphone apps, is indeed charging for rides and will "stand by" any drivers who receive city citations.

"The support of city users and drivers has been absolutely tremendous." Hourdajian said. "There have been tens of thousands of trips in Houston in the time we've been here, and we're thrilled by that reception."

She said the growing use of the service since its launch in February is a sign Houstonians think City Council should "have a sense of urgency" in approving regulatory revisions that would allow legal operation for Uber, Lyft and similar mobile-centric operators.

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A draft of possible changes will be reviewed early next week by a joint committee on transportation and public safety. How quickly that proposal moves to the full City Council for a vote depends on suggested changes from concerned council members and taxi industry officials.

Jim Black, executive vice president of governmental relations for Lyft, said he was unaware of plans for the service to mimic Uber and begin regular, for-fee operations before council's decision. He did note that the Houston Lyft app still offers riders the option to donate to their drivers.

In other cities, the company has swapped out that feature for fees once legal wrangling has been resolved.

Council members have expressed frustration at the quick launch of both ride-share companies, and now Uber's open defiance of city law, amid negotiations to create a legal regulatory structure that would protect business interests while still guaranteeing safety for riders.

"I'm not really surprised they chose that course," Councilman Mike Laster said, citing other cities that have had similar experiences.

A free model for now

In the last two years, cities such as Dallas, San Francisco and Madison, Wis., have rushed to regulate the web-based companies and, sometimes, levy fines when drivers operate outside existing municipal laws.

Taxi companies have condemned drivers for the services as rogue operators, questioned insurance coverage and sought to poke holes in their driver screening processes. Last week, several companies in Houston and San Antonio filed a federal lawsuit asking a judge to declare ongoing rides through Uber and Lyft as illegal.

Mayor Annise Parker, who has signaled an interest in quickly resolving the debate and adopting compromise regulations, made clear the city's position on any company that ignores existing rules.

"They're operating on a free model right now, and if money changes hands we're issuing citations," she said during a public council session Tuesday.

11 citations

Two weeks ago, the head of the city's Regulatory Affairs Department, Tina Paez, told council 26 citations had been issued so far and 11 of those had been levied against Lyft or Uber directly rather than the driver.

Councilman Michael Kubosh asked one Lyft user at Tuesday's meeting whether he was concerned about using a service that was operating illegally.

Losing battle?

"Absolutely not," said Erik Ibarra, a 34-year-old entrepreneur who had previously worked with council to regulate shuttle services that used electric or hybrid vehicles.

He said it is critical for innovative companies to prove they have consumer support, sometimes by taking risks like operating in gray areas of the law. He voiced confidence City Council would soon find room for the new mobile-based services in Houston's market.